On March 21, the FDIC extended the comment period on its proposed rule to require state, non-member banks and savings associations with more than $10 billion in consolidated assets to conduct annual stress tests, pursuant to Section 165 of the Dodd-Frank Act. Comments must now be submitted by April 30. FDIC Release. Proposed Rule Extension.
Dodd-Frank
FDIC Proposed Rule on Receivership Powers
On March 20, the FDIC proposed a rule, pursuant to section 210(c)(16) of the Dodd-Frank Act, that would permit the FDIC as receiver for a failed systemically important financial institution to enforce and prevent termination of the contracts of the institution’s subsidiaries or affiliates. Comments must be submitted within 60 days of publication in the Federal Register. FDIC Release. FDIC Rule on Receivership.
Comment Period Extension for Enhanced Prudential Standards Proposal
On March 2, the Fed extended the comment period until April 30 on a proposed rule to implement the enhanced prudential standards and early remediation requirements of Section 165 of the Dodd-Frank Act. Fed Release. Extension.
Fed Approves Capital One Acquisition of ING
On February 14, pursuant to Section 4(j) of the Bank Holding Company Act (BHCA), the Fed issued an order approving the acquisition by Capital One Financial Corporation of ING Bank, fsb. Of particular significance is the manner in which the Fed implemented the new requirement added to Section 4(j) of the BHCA by Section 604(d) of the Dodd-Frank Act. It requires the Fed to consider “risk to the stability of the United States banking or financial system” to the list of possible adverse effects that the Fed must weigh against any expected public benefits in considering proposals under Section 4(j). The February 14 order provides guidance as to certain types of transactions that would not likely present financial stability concerns because they likely would have only a de minimis impact on an institution’s “systemic footprint.” The order provides three examples of such transactions: (i) an acquisition of less than $2 billion in total assets; (ii) a transaction resulting in a firm with less than $25 billion in total assets; and (iii) a corporate reorganization, absent evidence that the transaction would result in a significant increase in interconnectedness, complexity, cross-border activities, or other risk. Fed Order.
CFTC Amendments to Registration and Compliance Obligations
On February 9, pursuant to Title IV and Title VII of the Dodd-Frank Act, the CFTC adopted final amendments to Part 4 of the CFTC’s regulations that: (i) rescind the exemption from registration provided in Section 4.13(a)(4); (ii) rescind relief from the certification requirement for annual reports provided to operators of certain pools offered only to qualified eligible persons under Section 4.7(b)(3); (iii) modify the criteria for claiming relief under Section 4.5; and (iv) require annual filing of notices claiming exemptive relief under a number of sections of the CFTC’s regulations. In addition, the final rules includes new risk disclosure requirements for commodity pool operators and commodity trading advisors. The final rules will become effective 60 days from publication in the Federal Register, except for amendments to Section 4.27, which will become effective on July 2. CFTC Release. CFTC Final Rules.
FDIC Proposed Stress Tests
On February 3, the FDIC requested comment on a notice of proposed rulemaking to implement Section 165(i)(2) of the Dodd-Frank Act which requires FDIC-insured state nonmember banks and FDIC-insured state-chartered savings associations with total consolidated assets of more than $10 billion to conduct annual stress tests. Comments must be submitted by March 23. This notice of proposed rulemaking is substantively similar to regulations proposed by the Fed and the OCC. FDIC Release. Notice of Proposed Rulemaking.
SEC No-Action Letter on Rule 15Ga-1 and Ginnie Mae
On February 1, the SEC issued a no-action letter to PNC Bank relating to Rule 15Ga-1 which, pursuant to Section 943 of the Dodd-Frank Act, requires ABS securitizers to disclose repurchase requests. The SEC indicated that it will not recommend enforcement action against a securitizer that does not file repurchase request disclosures with respect to Ginnie Mae MBS under certain circumstances. SEC No-Action Letter. Incoming PNC Request.
CFTC and SEC Report on International Swap Regulation
On January 31, pursuant to section 719(c) of the Dodd-Frank Act, the CFTC and the SEC delivered a report to Congress on international swap regulation. The report: (i) describes the regulatory framework for OTC derivatives in the Americas, EU and Asia; (ii) analyzes the similarities and differences across jurisdictions; (iii) discusses potential areas for harmonization; and (iv) makes recommendations for next steps. Joint Report.
OCC Proposed Stress Tests
On January 24, the OCC requested comment on a notice of proposed rulemaking to implement Section 165(i)(2) of the Dodd-Frank Act, which would: (i) require national banks and Federal savings associations with consolidated assets of more than $10 billion to conduct annual stress tests and (ii) impose reporting and disclosure requirements. Comments must be submitted by March 26. OCC Release. Proposed Rule.
FDIC Proposed Stress Testing for Large Banks
On January 17, the FDIC approved a notice of proposed rulemaking to implement Section 165(i)(2) of the Dodd-Frank Act, which would require FDIC-insured state nonmember banks and FDIC-insured state-chartered savings associations with consolidated assets of more than $10 billion to conduct annual capacity-adequacy stress tests. Comments must be submitted within 60 days of publication in the Federal Register. FDIC Release. Proposed Rule.